Did Maker's Mark Commit Brand Suicide?

For the last few days, the world of whiskey has been buzzing about the decision to cut the proof of Maker's Mark bourbon from 90 proof to 84 proof. [UPDATE: After several days of public flogging, Maker's Mark has reversed its decision to water down its signature bourbon.] In an interview, the distillery's chairman emeritus, Bill Samuels Jr., said that they had erred in their sales forecasts and diluting the bourbon was the best way to meet demand.

What Samuels is saying, in essence, is, "We're selling all the bourbon we have, so to increase unit sales we're going to water it down a little."

Our customers won't notice

It gets worse. Samuels goes on to say that Maker's Mark customers won't notice the difference. That may be a true statement for most customers, particularly those that drink their bourbon in cocktails. Indeed, Samuels says their professional tasters couldn't tell the difference, though he didn't elaborate on the tasting procedure. The problem with this is saying that the customers won't notice.

Do you really want to go on the record as saying the palates of your customers are so unrefined that they can't tell the difference when the whiskey is diluted? In reality, in blind taste tests most people probably can't tell the difference between similar colas, beers, whiskeys, etc. Nevertheless, brands still strive to maximize their taste differentiation. Can you imagine Coke saying, "We could change our formula a little, or even put Pepsi in our cans, and not many of our customers would notice."?

A Missed Opportunity

Maker's Mark could have used their looming shortage as an opportunity to make their brand stronger. If they encountered sporadic shortages for a period of years, they could raise prices and leverage the scarcity to take the brand up a notch in prestige.

Knob Creek Advertises Shortage

That's exactly what Knob Creek, also part of Beam, Inc., did when they faced the same problem as Maker's Mark a few years back. Did they water down their whiskey? Did they stop advertising (the product was sold out anyway) to boost profits? No - instead, they leveraged multiple psychological triggers by advertising the shortage (see Scarcity in Action).

First, they used scarcity - our brains prefer scarce things, even when they are identical to the same items in larger supply. Second, Knob Creek attributed the shortage to customer demand exceeding the limited supply, invoking social proof. And, in the process, they did some old-fashioned product pitching, saying, in effect, "Our product takes years of hard work to produce, and we're not going to take any shortcuts."

Maybe I'm not Maker's Mark target market - even before this fiasco, I preferred Knob Creek (or Elijah Craig) - but it seems to me that Maker's Mark took absolutely the wrong approach to their product shortage, and compounded that failure with terrible messaging.

What do you think - will this blow over in a week or two? Or has permanent damage been done to the brand? (And, for you bourbon enthusiasts, what's your favorite?)